The following table lists the Income statement and Balance sheet for First American Furniture

Company

You are a financial analyst at RBC$.$ Using the data above, you want to determine the value of

First American Bank's stock using the Free Cash Flow to Equity $($FCFE$)$ model. You believe that

the company's FCFE will grow at $40\%$ for three years and $12\%$ thereafter. Capital expenditures,

depreciation, working capital, and net debt are all expected to increase proportionately with

FCFE. The required rate of return on equity is $15\%.$

a$.$ Calculate the amount of FCFE per share for the year $2018.$Blank $1($sample answer: $$5\mathrm{.}15)$

b$.$ Calculate Projected $2021$ terminal value per share based on constant growth of $12\%$Blank $2$

$($sample answer: $$25\mathrm{.}15)$

c$.$ Calculate the current value of a share of the stock based on the two$-$stage FCFE model. Blank

$3($sample answer: $$25\mathrm{.}15)$